Fifty States, Fifty Stories: A Decade of Healthcare Reform ... · Insurer participation in the...

March 2020

Fifty States, Fifty Stories: A Decade of Health

Care Reform Under the Affordable Care Act –

Technical Report

Health Care Cost Trends

2

Copyright © 2020 Society of Actuaries

Fifty States, Fifty Stories: A Decade of Health Care Reform Under the Affordable Care Act—Technical Report

Caveat and Disclaimer

The opinions expressed and conclusions reached by the authors are their own and do not represent any official position or opinion of the Society of Actuaries or its members. The Society of Actuaries makes no representation or warranty to the accuracy of the information. Copyright © 2020 by the Society of Actuaries. All rights reserved.

AUTHORS

Paul Houchens, FSA, MAAA

Principal and Consulting Actuary

Milliman

Lindsy Kotecki, FSA, MAAA


Milliman

Hans Leida, PhD, FSA, MAAA


Milliman

SPONSOR

Society of Actuaries

Health Care Cost Trends

Strategic Research Program

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CONTENTS

Introduction.............................................................................................................................................................. 4

Data Dictionary ......................................................................................................................................................... 4

Data and Methods .................................................................................................................................................. 11 DATA SOURCES............................................................................................................................................................. 11 METHODS AND ASSUMPTIONS ................................................................................................................................... 12

Other Considerations .............................................................................................................................................. 13

Acknowledgments .................................................................................................................................................. 14

About the Society of Actuaries ................................................................................................................................ 15

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Fifty States, Fifty Stories: A Decade of Health Care Reform Under the Affordable Care Act—Technical Report

Introduction

The Patient Protection and Affordable Care Act (ACA) was enacted in March 2010, 10 years ago as of the writing of

this report. The law fundamentally changed the health care system in the United States and has had a profound

impact on many stakeholders. In our report “Fifty States, Fifty Stories: A Decade of Health Care Reform Under the

Affordable Care Act,” we performed a fact-based assessment of the outcomes under the ACA using a time series of

state-level data collected from public sources.

This report provides a summary of the state market data over time. It is intended to support actuaries and other

professionals in their ongoing work and research to understand the history of the individual and Medicaid markets

since the inception of the ACA and to develop their own estimates of future outcomes as the markets continue to

evolve. These results are technical in nature and assume the user is familiar with the structure of the ACA and state

insurance markets. Users are advised to consult with an actuary or other qualified professional when using or

interpreting these data.

Data Dictionary

Enclosed with this report is an Excel file providing the time series of data collected for our research. The data is

organized by state and year for each year from 2013–2020. Data metrics were collected for the following broad

areas:

• Market characteristics. State policy decisions as they relate to the individual and Medicaid markets.

• Population metrics. Uninsured population metrics and enrollment metrics for the individual and Medicaid

markets.

• Demographic information. Details on the demographic and metal level distribution of enrollees in the individual

market exchanges.

• Insurer participation. Insurer participation in the individual market exchanges and Medicaid managed care

programs.

• Premium information. Includes statewide average premium rate, advanced premium tax credit (APTC), premium

rate net of APTC, age rating factor, actuarial value and plan liability risk score. Also includes statewide average

premium rates for the benchmark silver and lowest-cost premium bronze, silver and gold plans offered on the

exchange in rural and urban areas.

• Risk adjustment information. The sum of the absolute value of risk adjustment transfers statewide, as well as

the statewide average age rating factor, actuarial value and plan liability risk score (as reported in the Centers

for Medicare and Medicaid Services (CMS) risk adjustment reports).

• Insurer financials. Statewide average preliminary medical loss ratio (MLR) and underwriting gain/loss margin for

all insurers in aggregate and for the subset of insurers offering ACA-compliant business.

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• Other information. Weights of “direct” enrollment from the American Community Survey (ACS) census data.

These weights may be useful in aggregating various metrics within or across states. Note, these values will not

tie to individual market insurer enrollment data.

Certain metrics were either unavailable or not collected for a subset of years between 2013 and 2020; entries for

those metrics will be null. Other metrics that were collected were only available for certain states (for example, a

metric may only be available for states that use the federal exchange platform); entries for metrics that are included

for some states but not others will be listed as “NA” where they were unavailable.

Table 1 provides a data dictionary containing a list of data field names, a description of the data contained in the

field and additional information necessary to interpret the data, as needed. As described more fully in the Data and

Methods section of this report, many of these metrics had to be estimated using a number of assumptions.

Table 1

DATA DICTIONARY

Field Name Description Comments

State State Abbreviation

Year Calendar Year 2013–2020

Market Characteristics

Market_Ind_Exchange Individual marketplace platform FP - federally facilitated exchange on federal platform SBE–FPs - state-based exchange on federal platform SBE - state-based exchange on state platform

Market_Ind_Transitional Indicator for whether transitional plans were allowed in that year

0 - transitional plans not allowed 1 - transitional plans allowed

Market_Ind_AgeCurve Prescribed age rating curve Fed_14 - federal age curve for 2014–2017 Fed_18 - federal age curve for 2018+ DC - state-specific age curve in Washington, DC MA - state-specific age in Massachusetts MN - state-specific age curve in Minnesota UT - state-specific age curve in Utah Community - no rate variation by age allowed

Market_Ind_MergedMarket Indicator for merged individual and small-group markets

0 - not merged 1 - merged

Market_Ind_StandarizedPlan State approach to having standardized plan design on the exchange

0 - no standardized plans 1 - all exchange plans are standardized 2 - Insurers must offer certain standardized plan(s) but are permitted to offer nonstandardized plans as well.

Market_Ind_1332Waiver Indicator for an active (approved and implemented) Section 1332 State Innovation Waiver

0 - no 1332 waiver 1 - state-based reinsurance program in effect 2 - waiver for ACA Small Business Health Options Program (SHOP) requirements

Market_Ind_PreACA_AllowedUW Indicator of pre-ACA (prior to 2014) market rules regarding rating for health status

0 - did not allow rating for health status 1 - allowed rating for health status

Market_Ind_PreACA_NoAgeRating Indicator for whether pre-ACA (prior to 2014) rates were allowed to vary by age

0 - rate variation by age allowed 1 - no rate variation by age allowed

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Market_MCaid_Expansion Indicator for whether the state’s Medicaid program was expanded under the ACA.

0 - not expanded 1 - expanded

Market_MCaid_BHP Indicator for whether the state has an active (adopted and implemented) Basic Health Program (BHP).

Y - yes N - no

Market_MCaid_RiskBased_MCP Indicator if the state operates a risk based Medicaid managed care program (MCP).

0 - MCP not present 1 - MCP present

Population Metrics

Pop_NumUninsured_Cit Total number of uninsured citizens under age 65.

Pop_NumUninsured_NonCit Total number of uninsured noncitizens under age 65.

Pop_UninsuredPerc Percent of the total under-age-65 population that is uninsured.

Pop_Enroll_ACA_On Total enrollment in an ACA-compliant plans purchased through the exchange.

Pop_Enroll_ACA_Off Total enrollment in ACA-compliant individual market plans purchased outside of the exchange.

Pop_Enroll_NonACA Total enrollment in non-ACA-compliant individual market plans (grandfathered or transitional).

Pop_MCaid_Total_Mem_NonExpan Total Medicaid membership for the nonexpansion population.

Pop_MCaid_Total_Mem_Expan Total Medicaid membership for the expansion population.

Pop_MCaid_MCO_Mem_NonExpan Total Medicaid enrollment for the nonexpansion population enrolled with a Medicaid managed care organization (MCO).

Pop_MCaid_MCO_Mem_Expan Total Medicaid enrollment for the expansion population enrolled with a Medicaid MCO.

Pop_Ind_MarketShare Percentage of individual market membership enrolled with the insurer with the largest market share in the state. Membership included in this calculation includes ACA-compliant and non-ACA-compliant membership for insurers offering ACA-compliant business in the state.

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Demographic Information

Demo_ACA_On_Metal_Platinum Percentage of exchange selections in platinum plans.

NA - Data not available NR - Data not reported due to low enrollment Note: Distributions by metal, age and FPL may not sum to 100% for one or more of the following reasons:

1) The source data for 2014 and 2016 (Assistant Secretary for Planning and Evaluation, ASPE, marketplace summary enrollment data) was rounded to the nearest percent.

2) The source data for 2015 (CMS ACA Enrollment Public Use Files) was reported at the county level, and enrollment was too low to report in certain cells.

3) State-based exchange states have had issues validating enrollment in certain years, where the reported enrollment by cell (metal, age or FPL) does not equal total reported enrollment statewide.

Demo_ACA_On_Metal_Gold Percentage of exchange selections in gold plans.

Demo_ACA_On_Metal_Silver Percentage of exchange selections in silver plans.

Demo_ACA_On_Metal_Bronze Percentage of exchange selections in bronze plans.

Demo_ACA_On_Metal_Cat Percentage of exchange selections in catastrophic plans.

Demo_ACA_On_Age_Under18 Percentage of exchange selections under age 18.

Demo_ACA_On_Age_1825 Percentage of exchange selections age 18 to 25.





Demo_ACA_On_Age_Over65 Percentage of exchange selections age 65 and older.

Demo_ACA_On_FPL_NotRequest Percentage of exchange selections that did not request financial assistance.

Demo_ACA_On_FPL_100150 Percentage of exchange selections with income >=100% and <=150% Federal Poverty Level (FPL).

Demo_ACA_On_FPL_150200 Percentage of exchange selections with income >150% and <=200% FPL.




Demo_ACA_On_FPL_Other Percentage of exchange selections with income <100% or >400% FPL.

Insurer Participation

Partic_ACA_On_Insurers Count of insurers offering ACA-compliant plans on the exchanges; insurers were counted using unique parent companies, derived from the HIX Compare database sponsored by the Robert Wood Johnson Foundation (insurance companies are identified as “carrier” in the database).

Partic_ACA_On_Insurers_Entrant Count of insurers offering plans on an ACA state exchange that did not offer plans on that exchange in the prior year; see Partic_ACA_On_Insurers for a description of how insurers were counted.

Partic_ACA_On_Insurers_Exits Count of insurers no longer offering plans on an ACA state exchange that offered plans on that exchange in the prior year;

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see Partic_ACA_On_insurers for a description of how insurers were derived.

Partic_MCaid_Insurers Count of Medicaid MCOs contracted with the state to provide benefits to Medicaid beneficiaries.

Partic_MCaid_Insurers_Entrant Count of Medicaid MCOs contracted with the state to provide benefits to Medicaid beneficiaries that were not contracted to provide benefits in that state the prior year.

Partic_MCaid_Insurers_Exits Count of Medicaid MCOs no longer contracted with the state to provide benefits to Medicaid beneficiaries that were contracted to provide benefits in that state the prior year.

Partic_ACA_On_Perc_One_Insurer Percent of the direct and uninsured populations (from the ACS data) that only have one insurer option available in their county of residence on the state's exchange.

Premium Information

Prem_ind_all_SWPrem Individual market average statewide premium rate per member per month (PMPM), including ACA-compliant and non-ACA-compliant business.

Prem_ind_ACA_SWPrem Individual market ACA-compliant average statewide premium rate PMPM (excludes catastrophic plans).

NA - Data not available in Massachusetts from 2014–2016; the risk adjustment program was operated by the state in those years.

Prem_ind_ACA_APTC Individual market ACA-compliant statewide average monthly APTC for individuals who received an APTC.

NA - Data not available

Prem_ind_ACA_SWPrem_wAPTC Individual market ACA-compliant statewide average premium rate PMPM after the application of APTCs for individuals who received an APTC.

NA - Data not available

Prem_Ind_ACA_On_SW_U_Min_B Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost bronze plan offered on the exchange in urban areas.

Prem_Ind_ACA_On_SW_U_Min_S Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost silver plan offered on the exchange in urban areas.

Prem_Ind_ACA_On_SW_U_Min_G Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost gold plan offered on the exchange in urban areas.

Prem_Ind_ACA_On_SW_R_Min_B Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost bronze plan offered on the exchange in rural areas.

Prem_Ind_ACA_On_SW_R_Min_S Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost silver plan offered on the exchange in rural areas.

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Prem_Ind_ACA_On_SW_R_Min_G Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost gold plan offered on the exchange in rural areas.

Prem_Ind_ACA_On_SW_U_Min_B_APTC Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost bronze plan offered on the exchange in urban areas, after the application of APTCs.

APTCs calculated for a single individual at 250% FPL.

Prem_Ind_ACA_On_SW_U_Min_S_APTC Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost silver plan offered on the exchange in urban areas, after the application of APTCs.


Prem_Ind_ACA_On_SW_U_Min_G_APTC Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost gold plan offered on the exchange in urban areas, after the application of APTCs.


Prem_Ind_ACA_On_SW_R_Min_B_APTC Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost bronze plan offered on the exchange in rural areas, after the application of APTCs.


Prem_Ind_ACA_On_SW_R_Min_S_APTC Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost silver plan offered on the exchange in rural areas, after the application of APTCs.


Prem_Ind_ACA_On_SW_R_Min_G_APTC Individual market ACA-compliant average monthly premium rate for a person age 40 for the lowest-cost gold plan offered on the exchange in rural areas, after the application of APTCs.


Prem_Ind_ACA_On_SW_U_2nd_S Individual market ACA-compliant average monthly premium rate for a person age 40 for the second-lowest cost silver plan offered on the exchange in urban areas.

Prem_Ind_ACA_On_SW_R_2nd_S Individual market ACA-compliant average monthly premium rate for a person age 40 for the second-lowest cost silver plan offered on the exchange in rural areas.

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Risk Adjustment Information

RiskAdj_Abs_RiskAdj_Transfer The sum of the absolute value of individual market risk adjustment transfers paid and received by insurers in the state. (See comments for states with a merged market.) Note: States with a merged individual and small-group market will reflect the risk adjustment transfer for the entire merged market. NA - Data not available in Massachusetts

from 2014–2016; the risk adjustment program was operated by the state in those years.

RiskAdj_ind_ACA_ARF Statewide average age rating factor for individuals enrolled in an ACA-compliant individual market plan (excludes catastrophic plans).

RiskAdj_ind_ACA_AV Statewide average actuarial value for individuals enrolled in an ACA-compliant individual market plan (excludes catastrophic plans).

RiskAdj_ind_ACA_PLRS Statewide average plan liability risk score for individuals enrolled in an ACA-compliant individual market plan (excludes catastrophic plans).

Insurer Financials

Financial_MLR_All Average individual market preliminary CMS medical loss ratio (MLR) for all insurers offering individual market business in the state.

Financial_MLR_ACA_Only Average individual market preliminary CMS MLR for insurers that offer ACA-compliant business in the state. Note that the non-ACA-compliant business for these insurers is still reflected in their MLR.

Financial_UW_GainLoss_All Average individual market underwriting gain/loss margin for all insurers offering individual market business in the state.

Financial_UW_GainLoss_ACA_Only Average individual market underwriting gain/loss margin for insurers that offer ACA-compliant business in the state. Note that the non-ACA-compliant business for these insurers is still reflected in their underwriting gain loss margin.

Other Information

weight_direct_U Direct enrollment in urban areas from the ACS data. 2019 and 2020 direct enrollment set

equal to 2018. weight_direct_R Direct enrollment in rural areas from the ACS data.

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Data and Methods

DATA SOURCES

The data provided in this report was generally compiled from publicly available sources. Table 2 includes a list of the

information and data sources used.

Table 2

DATA SOURCES

Data Link1

CMS ACA Enrollment Public Use Files (PUF) https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Marketplace-Products (retrieved Sept. 26, 2019)

CMS Medical Loss Ratio PUF https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr (retrieved Dec. 16, 2019)

CMS Effectuated Enrollment Summaries https://www.cms.gov/newsroom/fact-sheets/early-2019-effectuated-enrollment-snapshot (retrieved Aug.13, 2019)

CMS Risk Adjustment Reports https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs (retrieved Jan. 8, 2020)

Office of the ASPE marketplace summary enrollment reports and data for 2014 and 2015

https://aspe.hhs.gov/report/health-insurance-marketplace-2015-open-enrollment-period-january-enrollment-report (retrieved Sept. 4, 2019) https://aspe.hhs.gov/profiles-affordable-care-act-coverage-expansion-enrollment-medicaid-chip-and-health-insurance-marketplace-10-1-2013-3-31-2014 (retrieved Oct. 8, 2019)

HIX Compare database sponsored by the Robert Woods Johnson Foundation, providing plan design and premium rate data for 2014 (states on the federal exchange platform only) and 2015–2020 (all states)

https://hixcompare.org/ (retrieved Nov. 5, 2019)

Healthcare.gov premium database for states participating on federal marketplace.

https://www.healthcare.gov/health-and-dental-plan-datasets-for-researchers-and-issuers/ (retrieved Aug. 12, 2019, and Jan. 27, 2020)

Milliman internal database of plan design and premium rates for 2014 state-based exchanges.

N/A

Medicaid enrollment, budget and expenditure data provided on Medicaid.gov

https://www.medicaid.gov/index.html (retrieved Oct. 10, 2019)

Medical Expenditure Panel Survey through the Agency for Healthcare Research and Quality

https://www.ahrq.gov/data/meps.html (retrieved Nov. 1, 2019)

US Census Bureau’s American Community Survey data https://www.census.gov/programs-surveys/acs (retrieved Nov. 14, 2019)

NAIC annual financial statements https://www.naic.org/insdata_home.htm (retrieved Nov. 1, 2019)

1 Retrieval dates listed. Links may become outdated.

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Marketplace-Products

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Marketplace-Products

https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr

https://www.cms.gov/newsroom/fact-sheets/early-2019-effectuated-enrollment-snapshot

https://www.cms.gov/newsroom/fact-sheets/early-2019-effectuated-enrollment-snapshot

https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs

https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs

https://aspe.hhs.gov/report/health-insurance-marketplace-2015-open-enrollment-period-january-enrollment-report

https://aspe.hhs.gov/report/health-insurance-marketplace-2015-open-enrollment-period-january-enrollment-report

https://aspe.hhs.gov/profiles-affordable-care-act-coverage-expansion-enrollment-medicaid-chip-and-health-insurance-marketplace-10-1-2013-3-31-2014



https://hixcompare.org/

https://www.healthcare.gov/health-and-dental-plan-datasets-for-researchers-and-issuers/

https://www.healthcare.gov/health-and-dental-plan-datasets-for-researchers-and-issuers/

https://www.medicaid.gov/index.html

https://www.ahrq.gov/data/meps.html

https://www.census.gov/programs-surveys/acs

https://www.naic.org/insdata_home.htm

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METHODS AND ASSUMPTIONS

Many of the metrics included in the dataset are reported directly from their source. Certain other metrics were

estimated using a combination of data sources and assumptions. For example, premium metrics were collected at

the county or ACA rating region level and aggregated to the state level, and certain population metrics were

imputed from multiple data sources. Estimates included in the dataset are described in detail below.

PREMIUM RATE CALCULATION

• Premiums for 2013 are based on insurer MLR filings.

• Premiums by ACA rating region in each year from 2014–2020 were obtained from the HIX Compare database

sponsored by the Robert Wood Johnson Foundation (except for state-based exchange states in 2014).

• Premiums by ACA rating region for state-based exchange states in 2014 were obtained from Milliman’s internal

database of plan design and premium rates for 2014 state-based exchanges.

• Statewide average premiums were calculated by weighting together premiums by county using “direct”

enrollment by county from the ACS census data. When a county spanned multiple ACA rating areas, the

enrollment within that county was assumed to be distributed evenly across those areas. Enrollment for 2019

and 2020 is not yet available and was assumed to follow 2018.

• Advanced Premium Tax Credits were estimated using the second-lowest silver plan for an individual with

income equivalent to 250% federal poverty level.

INSURER PARTICIPATION AND SERVICE AREAS

• Insurer participation is calculated by counting unique parent companies in each state, derived from the HIX

Compare database sponsored by the Robert Wood Johnson Foundation (insurance companies are identified as

“carrier” in the database). Insurers are counted once for each state exchange they participate in (for example, if

an insurer participates in three state exchanges and has plans under two legal entities in each state, the count

for that insurer would be three).

• Service area information is publicly available from healthcare.gov at the plan and county level for states on the

federally facilitated exchange platform.

• Service area information is publicly available from the HIX Compare database at the county and issuer ID level

(but not the plan level) for state-based exchange states. Therefore, an insurer’s entire service area is assumed

to apply to all plans the insurer offers within each ACA rating region. To the extent that insurers offer plans in a

subset of counties within an ACA rating region, the percentage of the population with only one insurer option

may be higher than reported in the data.

• Certain metrics are provided for the subset of insurers offering ACA-compliant business in the state. We

identified insurers offering ACA-compliant business by matching Issuer IDs from insurer MLR filings to the Issuer

IDs reported in the CMS risk adjustment reports.

POPULATION ESTIMATES

• Uninsured counts were retrieved from the ACS census data. The 2019 uninsured count was estimated based on

2018 uninsured rate from ACS data and U.S. total population reported by www.census.gov as of July 1, 2019.

• The distribution of individual market enrollment by ACA rating region was estimated from county-level ACS

census data for the direct population. When a county spanned multiple ACA rating areas, the enrollment within

that county was assumed to be distributed evenly across those areas. Enrollment for 2019 and 2020 is not yet

available and was assumed to follow 2018.

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• On-exchange enrollment was obtained from the individual market effectuated enrollment reports released by

CMS.

• Off-exchange enrollment was estimated based on differences between individual market billable risk

adjustment member months reported in risk adjustment reports and exchange enrollment reported in CMS

effectuated enrollment reports.

• Medicaid enrollment was retrieved from CMS eligibility reports and includes all beneficiaries receiving

comprehensive coverage (including dual and non-dual eligibles). 2019 Medicaid enrollment reflects CMS-

reported eligibility for September 2019.

UNDERWRITING GAIN/LOSS MARGIN

• Underwriting gain/loss margin was calculated from insurer MLR filings using the underwriting gain/loss margin

formula prescribed in the NAIC Supplemental Health Care Exhibits.

PERCENTAGE OF POPULATION WITH ONLY ONE INSURER OPTION AVAILABLE

• The percentage of population with only one insurer option was estimated based on plan offerings at the ACA

rating area level and the population identified as “direct” or “uninsured” from the ACS census data by county.

When a county spanned multiple ACA rating areas, the population within that county was assumed to be

distributed evenly across those areas. Enrollment for 2019 and 2020 is not yet available and was assumed to

follow 2018. As noted in under “Insurer Participation and Service Areas” above, the percentage of the

population with only one insurer option may be higher in state-based exchange states to the extent that

insurers offer plans in a subset of counties within an ACA rating area.

Other Considerations

Milliman, Inc. (Milliman) was retained by the Society of Actuaries (SOA) to conduct fact-based, data-driven research

on measurable outcomes in the individual and Medicaid markets 10 years following the inception of the Patient

Protection and Affordable Care Act.

We relied on publicly available data and other information for this analysis. We have performed a limited review of

the data and other information and checked for reasonableness and consistency; we have not found material

defects in the data or information used. If there are material defects in the data or other information, it is possible

that they would be uncovered by a detailed, systematic review and comparison of the data to search for data values

that are questionable or for relationships that are materially inconsistent. Such a review was beyond the scope of

this assignment.

Differences between estimates in this analysis and actual amounts depend on the extent to which estimated

outcomes conform to the assumptions made for this analysis. It is certain that actual amounts will not conform

exactly to the assumptions used in this analysis. Actual amounts will differ from estimated outcomes to the extent

the assumptions in this analysis are not realized. This analysis of historical data and outcomes may differ materially

from future outcomes.

Guidelines issued by the American Academy of Actuaries require actuaries to include their professional

qualifications in actuarial communications. Paul Houchens, Lindsy Kotecki and Hans Leida are members of the

American Academy of Actuaries and meet its qualification standards to perform the analysis and render any

actuarial opinions contained herein.

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Acknowledgments

The authors would like to acknowledge and sincerely thank the professionals on the SOA’s Project Oversight Group

who contributed valuable ideas, thoughtful guidance and diligent review throughout the development of this

research. We would also like to thank the SOA’s research coordinators for their efforts in organizing and supporting

the project.

We would also like to recognize and thank Stan Westrom, ASA, MAAA, and Ian McCulla FSA, MAAA, for their

valuable contributions to the data collection and analysis.

Project Oversight Group Members

Ken Avner, FSA, MAAA

Joan Barrett, FSA, MAAA

Elaine Corrough, FSA, MAAA

Ian Duncan, FSA, MAAA, CERA

Geof Hileman, FSA, MAAA

Olga Jacobs, FSA, MAAA

Enver Karadayi, ASA, MAAA

Rebecca Owen, FSA, MAAA

Margie Rosenberg, PhD, FSA

Kurt Wrobel, FSA, MAAA (POG Chair)

SOA Project Coordinators

Achilles Natsis, FSA, MAAA, FLMI

Erika Schulty

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About the Society of Actuaries

The Society of Actuaries (SOA), formed in 1949, is one of the largest actuarial professional organizations in the world

dedicated to serving more than 31,000 actuarial members and the public in the United States, Canada and

worldwide. In line with the SOA Vision Statement, actuaries act as business leaders who develop and use

mathematical models to measure and manage risk in support of financial security for individuals, organizations and

the public.

The SOA supports actuaries and advances knowledge through research and education. As part of its work, the SOA

seeks to inform public policy development and public understanding through research. The SOA aspires to be a

trusted source of objective, data-driven research and analysis with an actuarial perspective for its members,

industry, policymakers and the public. This distinct perspective comes from the SOA as an association of actuaries,

who have a rigorous formal education and direct experience as practitioners as they perform applied research. The

SOA also welcomes the opportunity to partner with other organizations in our work where appropriate.

The SOA has a history of working with public policymakers and regulators in developing historical experience studies

and projection techniques as well as individual reports on health care, retirement and other topics. The SOA’s

research is intended to aid the work of policymakers and regulators and follow certain core principles:

Objectivity: The SOA’s research informs and provides analysis that can be relied upon by other individuals or

organizations involved in public policy discussions. The SOA does not take advocacy positions or lobby specific policy

proposals.

Quality: The SOA aspires to the highest ethical and quality standards in all of its research and analysis. Our research

process is overseen by experienced actuaries and nonactuaries from a range of industry sectors and organizations. A

rigorous peer-review process ensures the quality and integrity of our work.

Relevance: The SOA provides timely research on public policy issues. Our research advances actuarial knowledge

while providing critical insights on key policy issues, and thereby provides value to stakeholders and decision

makers.

Quantification: The SOA leverages the diverse skill sets of actuaries to provide research and findings that are driven

by the best available data and methods. Actuaries use detailed modeling to analyze financial risk and provide

distinct insight and quantification. Further, actuarial standards require transparency and the disclosure of the

assumptions and analytic approach underlying the work.

Society of Actuaries 475 N. Martingale Road, Suite 600

Schaumburg, Illinois 60173 www.SOA.org

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